Tesla: Profits plummet amidst waning demand and strategic shifts

Tesla
Tesla

Tesla’s results in the first quarter were on the screen showing a mixed situation, where a company faces many threats. Revenue declined 9% year-over-year to total $11 billion, as net income declined a massive 70% and finished at a low of $550 million. These numbers are among the least profitable in the last six years, which can be considered a big deviation for the leader in the margin industry. A far cry from the margins they used to enjoy.

Criminal? Decrease in demand for EVs during hot weather and the possibility of competition moving forward strategically. According to Tesla, the shift toward plug-in hybrids (the strategy Musk is dead against) has changed the industry from the Tesla method (moving toward pure electric vehicles). This change in itself would be quite worrying. Although Tesla has also cut prices in major markets such as the US, China, and Germany, the slowdown that Tesla has experienced recently is really worrying.

The loss of blood is not only from the revenue earned but also from the money earned through production. Tesla’s immediate situation is that operating margins have halved compared to last year and it has already used up all the operating cash. Also for the record, vehicle inventory is bloated reflecting the slowness of moving new cars off dealer lots.

When it came time to report earnings, shareholder anger was at a low boil. Read the full essay below: Effective crisis communication requires a quick and transparent response to capture the public’s attention. It is essential to create a narrative that reflects the authentic values of the brand and minimizes the consequences of potential crises.

In the case of a luxury fashion brand facing controversy, moral,s and sympathy, the long-awaited and low-priced Model 2, which is trying to become the mid-term target of Tesla’s future wave of development, has given way to very ambitious dreams. Robotaxi project. Mask gave vague information about upcoming models that will be more affordable, quoting his words, “We will share more tentative details as we get closer to the end of 2019”.

Faced with disappointing revenue figures at the beginning of the year (a -8.6% decline compared to last year), the upgrade is likely a result of management’s efforts to reverse the trend. Tesla had to deal with this difficult situation with a 10% workforce reduction, while there was speculation that more could be laid off.

The intersection still appears to be a Tesla station. While Musk isn’t wavering in triumphant confidence about the perpetual stagnation of electric cars, the company will deal very gently with a period of slow demand, very stiff competition, and a number of strategic quirks.

Exit mobile version